Bia Kud Chum, a Thai Experience in Community Currency

The richly colored Bia notes evoked excited curiosity at a workshop during the Asia Social Forum in 2003. The community currency notes were presented by young Thai activists during a session about initiatives for local empowerment. “The Bia is part of our move towards self-reliance”, explained Pornpta Khangpukiaw, “This is a response to the loss of intimacy and relations within community, because of the race for making money.”

How does it work?

The glossy, artistic finish of the Bia Kud Chum notes could compete with the most sophisticated currency notes anywhere in the world. Unlike conventional currency, these notes do not carry green-tinted or sepia-tone portraits of national heroes or founding fathers. The Bia are alive with colorful paintings of farmers at work in paddy fields, scenes of community dances, or children at play and at school. Where conventional currency notes carry a “promise to pay” message from the governor of the central bank, the Bia notes carry this message: “This Bia is for exchange of goods within the community alone (…) so that money is not leaking out of the community.”

The Bia Kud Chum has been operating in the Pomprab District of Thailand since 2000 and is equal in value to the Thai baht but cannot be exchanged for the official currency. The notes come in denominations of 1, 5, 10 and 20. The word ‘Bia’ means seedling and alludes to the endeavour being like small seedlings which grow into large trees. The aim is to nurture and expand the local economy by encouraging the purchase of local products.

Each Bia is signed by a representative of the Bia Bank and a Buddhist monk who is highly revered by the community. Bia notes are issued by the Bia Bank at Santisuk and each registered member of the community is entitled to ‘borrow’ up to 500 bia, free of interest. Membership is restricted to people who live in the five neighboring villages. These members then exchange the Bia for a wide range of commodities in their local area. Unregistered villagers get drawn into the circle by accepting Bia as valid tender.

The Bia was born out of the Thai Community Currency Systems project, initiated in 1997 as a collaborative effort by various Thai NGOs. The emergence of the Bia is part of a larger trend of community based initiatives aimed at securing local self-reliance. For example, there are associations of traditional herbal practitioners, “self-sufficiency groups”, a community owned rice mill supporting chemical free rice production, cooperative shops, and women’s groups producing soya milk, herbal shampoo and dishwashing liquid.

The elected managers of the Bia Working committee perform three main functions. First, they keep accounts and maintain records of all Bia transactions. Second, they foster extension activities to support the efficient and balanced use of Bia between members. Third, they constantly monitor and evaluate the use of Bia.

Bia currency, village self-reliance and the law

Since the appearance of Bia in the marketplace attracted much attention from the mass media, officials from all levels of government came to investigate. There were representatives of the district and provincial government offices, police, military, internal security, the Prime Minister’s Office and the Central Bank of Thailand. Some featured the use of Bia might violate the law or could be a danger to national security. Some even suggested it might be seen as a strategy to create an independent state. Under the direction of the Bank of Thailand, the use of the Bia was suspended at the end of April, after only one month in circulation. At that point of time, there were 120 Bia members, of which 33 had withdrawn a total of 7,000 Bia from the Community Self-Reliance Development Group (Bia Bank).

The Board of the Bank of Thailand has decreed that the use of Bia Kud Chum violates that country’s Currency Act, which forbids anyone from making, distributing, using or issuing any material to replace currency unless permission has been granted by the Minister of Finance. The Bia Kud Chum Working Committee responding by changing the name of the system from ‘Bia Bank’ to the ‘Community Self-Reliance Development Group’.

“In their effort to become self-reliant, the villagers of the five communities have been accused of breaking the law, an accusation that is far from being justified. Even though the Government has announced its intention to encourage the development of self-reliant and strong community economies, the case of Bia Kud Chum they are actually preventing this from really happening (why is it that when big businesses issue their coupons there seem to be no legal problems, whilst when it comes to villagers, there is?). Perhaps it is time for government officials to join with Kud Chum villagers in exploring ways to legitimize the Bia so that community self-reliant economics and strong communities can become a reality.”

There appears to be a link between the emergence of the Bia and the Sawat Upahat, a local brewery network which claims 100,000 members and has been promoting a form of alternative livelihood security through both ground level struggles and policy level intervention. Thailand has an old tradition of whiskey made from rice with combinations of herbs. Such brews are an essential component of many traditional ceremonies. In 1958, the Thai government centralized control over the breweries and banned production of the local brew. This put whiskey production entirely in the hands of commercial companies, which is far too expensive for many people. The Sawat Upahat movement encourages people to defy the ban on local brewing and revive the tradition.

From the conventional economist’s point of view, the Bia is useless since it buys nothing in the national economy of Thailand, not even a bus ride out of the village. But, says Pranomporn Tetthai of the Bia Kud Chum working group, “That is exactly the point! We are trying to reduce the number of things villagers buy from outside the community and encourage the support of locally produced goods and services. […] Our agricultural income (from the sale of jasmine rice) will still be in baht. Therefore, we will still have baht for necessary expenses such as hospital care. However, for local goods and services we can reduce our expenses by exchanging in Bia.”

Community currencies across the world

The emergence of the Bia in Thailand signals the fledgling presence of community currencies across Asia, including Hong Kong, Indonesia, Japan, Korea and Papua New Guinea. Japan is undergoing a virtual explosion of diverse forms of complementary currencies, including LETS (Local Exchange Trading Systems) and HOURS. Bernard Lietaer, author of The Future of Money, has noted with due fascination that in the sphere of health care, many Japanese people prefer HOURS based services instead of those supported by the conventional Yen. It turns out that services under the HOURS system bring a higher quality of caring than the professional market-transaction variety.

At the other end of the world, in Mexico there is the Tlaloc mutual credit system, which is named after the Aztec rain god. This currency takes the form of cheques that have to be endorsed by the user who sign on the reverse side. The credits exchanged are reported to a coordinator who maintains the record on computer. The members of Tlaloc and Bia keep in touch and learn from each other’s successes and failures.

The website of a network called Appropriate Economics carries reports on both modern and traditional forms of local money spread across Asia, Africa and Latin America. There is also a web-based International Journal of Community Currency Research (IJCCR) which serves as the hub for the scholarly and activist debate.